Friday, December 12, 2008

The American auto industry has been a joke for as long as we can remember, but now it looks like GM and Chrysler finally may be giving up the ghost. The congressional bailout bill failed in the Senate yesterday, so those two car manufactures won't be getting any of that sweet sweet $14 billion they were asking for, which means that they might not survive past Christmas. The NY Times reports:

Two of the Big Three, General Motors and Chrysler, have said they are so short of cash that they may not be able to survive through this month without aid, and the third, Ford Motor, is also struggling with weak sales.

Harry Reid then went on to tell everybody that Christmas was cancelled because of this news.

“It’s over with,” the Senate majority leader, Harry Reid of Nevada, said on the Senate floor, after it was clear that a deal could not be reached. “I dread looking at Wall Street tomorrow. It’s not going to be a pleasant sight.”

Mr. Reid added: “This is going to be a very, very bad Christmas for a lot of people as a result of what takes place here tonight.”

So, Christmas is ruined and the stock market will blow up today, according to Harry Reid yesterday. Was he right? For that answer, let's turn to our new favorite econ writer and bowling buddy Michael G., who writes:

Investors were scrambling on Friday to come to terms with the implications of the bill’s unexpected collapse, which all but assures serious problems in an industry once considered the backbone of American manufacturing....Stocks opened lower on the news, as the Dow Jones industrial average fell more than 200 points within minutes of the open. The blue-chip index was down about 130 points at 9:45 a.m. The broader Standard & Poor’s 500-stock index was down 1.9 percent.